Sports Direct International Plc. (SDIPF.PK,SPD.L) announced that it has entered into separate agreements to acquire majority stakes in two leading European sporting goods retailers: Sports Eybl & Sports Experts AG or EAG, based in Austria; and Sportland International Group or SIG, based in the Baltic region.
Sports Direct announced that it agreed to acquire a 51% equity stake in EAG, the leading sporting goods retailer in Austria. The acquisition of EAG will be made by Sportsdirect.com Retail Limited, a wholly owned subsidiary of Sports Direct. The consideration for the EAG transaction comprises 10.5 million euros payable to the current shareholders of EAG – EYBL Holding AG and LUDWIG EYBL Privatstiftung or “the Eybl Family”. In addition, Sports Direct has agreed to invest 30.0 million euros in subordinated debt in EAG.
Upon the completion, Sports Direct has the right for five years to acquire the remaining shares in EAG from the Eybl Family for 15.5 million euros. During this period, the Eybl Family also has the right to sell its remaining shares in EAG to Sports Direct for 5.0 million euros.
From 31 December 2019, Sports Direct and the Eybl Family have the right to acquire the other party’s shareholding in EAG based on a multiple of EBITDA.
For the 12 month period ending 31 August 2012, EAG generated revenue of 323.8 million euros.
EAG also owns 96% of a real estate company, SPORT EYBL Immobilien AG or IAG. IAG owns 18 properties, which are leased to SSG, including 15 stores, a warehouse and SSG’s head office premises. The Eybl Family owns the remaining 4% of IAG directly.
Representatives of the Eybl Family, including Lorin Leitner, will serve on the supervisory boards of EAG, SSG and IAG together with Sports Direct representatives. Following the transaction, Hubert Schenk and Michael Weccardt, will remain as the Chief Financial Officer and Chief Operations Officer of SSG.
The EAG transaction is subject to various conditions, including clearance from the Austrian competition authorities, and is expected to complete by 31 July 2013.
In addition, Sports Direct said that it has entered into an agreement to acquire a 60% equity stake in SIG, the largest sporting goods retailer in the Baltic region.
The SIG transaction is subject to various conditions, including clearance from local competition authorities, and is expected to complete by 30 June 2013.
Sports Direct stated that the consideration for the EAG transaction and the SIG transaction will be funded from its operating cash flows and existing bank facilities.
Sports Direct noted that it will report its Preliminary Results on 18 July 2013.
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by RTT Staff Writer
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